Non-political nonprofit's spending spikes in election years

Trade group spent millions bashing Obama in 2012

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A scene from the Americans for Job Security's "Darker Future" ad.

Screengrab

Pro-business powerhouse Americans for Job Security cannot, by federal law, make politics its primary purpose.

But as contentious federal elections and state-level ballot initiatives raged during 2012, the nonprofit organization’s income spiked at least tenfold compared to 2011, a non-election year, records show.

The cash windfall fueled tens of millions of dollars of overtly political spending, much of it in the form of relentless advertisements skewering President Barack Obama.

New IRS Form 990 filings show Americans for Job Security raised $2.5 million during fiscal year 2011 and carried just $727,000 in reserve through October 2011. IRS records for 2012 are not available and likely won’t be until the year’s end.

But Federal Election Commission filings show in 2012 the group spent $15.2 million to attack Obama and another $650,000 to oppose Eric Hovde, a U.S. Senate candidate in Wisconsin, during a Republican primary.

The organization, which was founded and run by a Republican political operative, also spent $11 million to help support passage of an anti-union California ballot proposition, the state’s campaign finance regulators revealed.

Unlike super PACs, which must disclose their donors, Americans for Job Security is a 501(c)(6) tax-exempt trade organization that keeps its funders secret, even when it’s engaging in the same kind of overt candidate bashing that super PACs of all political stripes so often do.

Its ties to Republican politicians and political operatives are well documented.

In 2010, another election year, the group also saw a big bump in fundraising, showing $12.4 million, IRS filings indicate.

Such activity is evidence Americans for Job Security continues operating as a trade association with impunity, unafraid of the IRS, said Craig Holman, the government affairs lobbyist for reform advocacy group Public Citizen, which has filed several complaints against the outfit in recent years.

Some Republicans have also criticized the group, with prominent GOP lobbyist Charlie Black telling the Center for Public Integrity in 2010 that its founder, New Hampshire political operative Dave Carney, explained to him, “If you have a candidate, a campaign or an election that needs some help, we can be of some assistance.”

Said Holman: “It’s the poster child for dark, shadow groups that almost exclusively do electioneering and should be a political committee that registers with the Federal Election Commission.”

Americans for Job Security’s president is Stephen DeMaura, a former New Hampshire Republican Party executive director. He declined to answer questions about Americans for Job Security’s finances. IRS records indicate he earned a $152,659 salary in 2011, not including another $15,601 in additional compensation.

“Manufactured accusations from ideological opponents regarding our work will not distract Americans for Job Security from fighting for public policies that strengthen our economy and create more and better-paying jobs,” DeMaura said in response to the criticism.

The group’s mission is to permit “businesses to work together to promote a strong job-creating economy in which workers have good job opportunities and businesses can thrive,” according to its IRS paperwork. “The organization promotes governmental policy that reflects economic issues of the workplace.”

Nevertheless, the group has routinely and directly involved itself in politics since its creation in 1997 by Carney, who himself has maintained close ties to Texas Gov. Rick Perry.

It also shares Alexandria, Va., office space with Crossroads Media, which is led in part by former Americans for Job Security President Michael Dubke. Crossroads describes itself as the nation’s “premier Republican media services firm.”

Dubke also runs the Black Rock Group with Carl Forti, a prominent GOP operative who occupied top positions at super PACs American Crossroads and pro-Mitt Romney Restore Our Future.

Americans for Job Security paid Crossroads Media more than $304,000 in 2011 for “marketing and media placement” services, its new IRS filing states.

Art Hackney, a political consultant in Alaska, and Nicholas Terzulli, a New York-based political operative, are listed at Americans for Job Security’s directors for 2011.

Hackney was intimately involved in an Alaska ballot initiative campaign in which Americans for Job Security funneled money into another nonprofit, Alaskans for Clean Water.

Following an investigation of this money flow, the Alaska Public Offices Commission concluded in a 2009 report that “Americans for Job Security has no purpose other than to cover various money trails all over the country.”

If the IRS is investigating whether Americans for Job Security is violating its tax status and should register as a political group, it’s not saying.

“Federal law prohibits the IRS from discussing specific taxpayers or situations,” agency spokesman Dean J. Patterson said.

A pair of former IRS officials are concerned that even if the agency wanted to investigate Americans for Job Security or other similar nonprofit groups of any political persuasion, it might not be able.

“The IRS simply doesn’t have the budget to look at everything that needs to be looked at, and there are serious political considerations in play, too,” said Floyd Williams, a senior tax counsel at Public Strategies Washington and former IRS director of legislative affairs. “In Congress, the liberals will jump up and down if IRS officials don’t go after right-wing groups, and the right will come after them if they think they’re picking on their friends.”

Marcus Owens, a former director of the IRS’s exempt organizations division and current attorney at Caplin & Drysdale, says his former agency is “not going out of its way to send enforcement signals” to politically active nonprofits, encouraging some groups “to use the occasion of the election to raise funds in a major way.”